A salvage title vehicle is a car that has undergone extensive damage to the point where repair costs would exceed more than 75 percent of the vehicle’s overall value. As a result, the vehicle is considered a total loss by the insurance agency that filed the claim on it. While salvage title vehicles can’t legally be driven in their current state, they can be fixed up and repaired by savvy mechanics who recognize their potential and appreciate their low price tag. If you’re interested in purchasing a salvage vehicle but don’t have the cash on hand to do so, you may need to secure financing. The question is, can you finance a salvage title vehicle? Below we will discuss the ins and outs of financing a salvage title vehicle.
Those who have their heart set on purchasing a salvage title vehicle will be happy to know that securing financing is possible. But it’s not going to be easy. Because salvage title vehicles have sustained extensive damage and have already been written off by an insurance agency, many lenders view them as highly risky investments and are hesitant to offer financing. As such, the process of financing a salvage title vehicle will generally be more challenging than if you purchased a clean or repaired title vehicle. To improve your chances of securing financing for the salvage vehicle you have your eye on, check out some of our helpful tips listed below.
Larger banks typically avoid financing vehicles with salvage titles. As such, you may have better luck trying to secure financing from a smaller bank or credit union. In order to compete with the larger banks, such institutions often broaden their lending practices, which means you may have a chance at getting your salvage vehicle financed.
If you find a small bank or credit union that is willing to finance your salvage vehicle, they will likely require that you obtain a collision or comprehensive insurance policy. Unfortunately, doing so can also pose a bit of a challenge. When it comes to finding comprehensive coverage, you may have better luck with a larger auto insurance company, as they will be able to spread the risk over a wider range of insured vehicles. Trying to obtain insurance from a company that you already have auto or homeowner’s insurance from may also increase your chances of success, especially if you have a good relationship with them.
In order to get a lending agency to take a chance on a riskier vehicle, you will have to convince them that you are a low-risk borrower. To do this, it is beneficial to provide them with as much concrete evidence as you can in the form of documentation. For example, you should supply the insurer with:
Providing such documentation will likely help improve your chances of securing financing for your salvage vehicle significantly.
AE of Miami is a leading salvage car dealer in Miami. In addition, we also export our vehicles to all major shipping ports across the country. To get a great deal on a salvage title car, check out our extensive array of transparent listings.